Please ensure Javascript is enabled for purposes of website accessibility

Why Kandi Technologies Stock Slumped on Friday

By John Rosevear – Jul 31, 2020 at 2:30PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

After a wild rally on Wednesday's news that Kandi's cars are coming to America, investors are reassessing.

What happened

Shares of Chinese electric-vehicle maker Kandi Technologies (KNDI -3.36%) were trading lower on Friday afternoon, two days after a surprise rally that more than doubled its share price. 

As of 3:15 p.m. EDT, Kandi's American depositary shares were down about 13.4% from Thursday's closing price -- but still up about 83% for the week. 

So what

Kandi's stock price jumped 140% on Wednesday afternoon, after the company said that it will launch two of its small electric cars in the United States at a virtual event on Aug. 18. Interested customers will be able to reserve the Kandis with a $100 deposit at that time, the company said.

The two cars that Kandi plans to bring to the U.S. are hardly Teslas. They're both urban commuter cars with small battery packs and, shall we say, modest performance. Kandi's U.S. flagship, the K23, is an upright four-door hatchback with an estimated range of 188 miles, a price of about $30,000 before incentives, and a very un-Tesla top speed of just 70 mph. 

A white Kandi K23, a stubby four-door electric hatchback, at a charging station

Kandi's K23 doesn't look or perform like a Tesla, but it will cost considerably less. Image source: Kandi Technologies.

That doesn't stack up well against the Chevrolet Bolt or Nissan Leaf, both of which offer better range, top speeds more appropriate to U.S. highways, and nationwide service networks -- and build quality that is known to be high -- for not much more money.

Kandi's other U.S.-bound model, the simpler and cheaper K27, is definitely intended as a city car: It has estimated range of around 100 miles, a price of $20,000 before incentives, and a top speed of 63 mph. 

Now what

It's no surprise that the company's stock soared on Wednesday's news, given the intense investor interest in electric-vehicle stocks in recent months triggered by Tesla's massive run-up earlier in 2020. Nobody wants to miss out on the next Tesla -- but on closer examination, Kandi might not be the right horse to bet on in that race. 

I think auto investors have been doing that closer examination and that's why Kandi's stock fell back on Friday. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tesla. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Kandi Technologies Group, Inc. Stock Quote
Kandi Technologies Group, Inc.
KNDI
$2.01 (-3.36%) $0.07

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/25/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.